Newspaper article The Journal (Newcastle, England)

An Election Means Volatility, Especially When It's Wide Open; SHARE WATCH

Newspaper article The Journal (Newcastle, England)

An Election Means Volatility, Especially When It's Wide Open; SHARE WATCH

Article excerpt

Byline: Jeffrey Ball, Brewin Dolphin

On this day in 1570, John Johnson was born in a narrow house in the shadow of York Minster. The son of a church lawyer, Johnson grew up to become the caretaker of an unremarkable Westminster house.

It was only when he was found in its cellar surrounded by 36 barrels of gunpowder one November evening that his alias was revealed and he became better known to the world under his true name of Guy Fawkes.

A lot has changed since 1570 but dissatisfaction with the establish ment is nothing new and you can safely assume that if he was here today, he would not be very impressed at the attention the battle for top spot in the Houses of Parliament is currently receiving.

Next month's general election will continue to flood the news as all sides make their cases. But despite their best efforts, none of the campaigns have yet lit a fire under voters, meaning that, once again, with even more potential coalition permutations than last time, we appear to be heading for an election with no clear winner.

Not even the best-informed commentators can call it with any certainty and if there is one thing stock markets do not like it is uncertainty.

The shadow of a tight election partly explains why stock markets have been so volatile of late; the FTSE 100 index has plunged to multi-year lows and hit a new all-time high, all in the space of a few months.

History suggests this is nothing new. In the periods before the Conservatives won with small majorities in 1970 and 1992, the FTSE all-share index fell 11% and 5% respectively. The honour of the biggest market fall, though, goes to the Labour Party; markets fell 21% ahead of its 1974 victory by the tiniest majority.

Volatility has clearly been a theme. So how much will the result of the election affect the FTSE 100 index? …

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